Nestled quietly in the rolling Nevada hills between sprawling industrial buildings, 805 retired electric vehicle batteries lie tucked beneath uniform white tarps, carefully arranged and drawing little attention. Passersby might never guess that this modest site represents the largest microgrid project in North America, supplying power to a cutting-edge, 2,000-GPU modular data center operated by AI infrastructure provider Crusoe—or that it marks the ambitious next chapter in Redwood Materials CEO and co-founder JB Straubel’s entrepreneurial journey.
At an event on Thursday at its facility in Sparks, Nevada, Redwood Materials officially unveiled its new venture, Redwood Energy. Leveraging the thousands of EV batteries that Redwood has accumulated through its recycling operations—batteries still useful yet not quite ready for recycling—the new energy storage enterprise aims to provide sustainable and cost-effective power solutions to commercial clients, with its initial focus squarely on AI-driven data centers.
Partnering with Crusoe, Redwood’s first project uses retired EV batteries to store the energy captured from an adjacent solar installation. This facility, featuring a power generation capacity of 12 megawatts with 63 megawatt-hours of storage, currently feeds renewable electricity directly to Crusoe’s modular data center. Crusoe previously gained visibility for its expansive AI data center campus—the Stargate project—in Abilene, Texas.
According to Redwood, more than 70% of all discarded or retired EV battery packs in North America pass through their facility. The company has quietly established a significant battery inventory of over one gigawatt-hour, a figure expected to grow by another four gigawatt-hours within the coming months. Redwood’s ambitions extend even further: by 2028, they plan to have deployed more than 20 gigawatt-hours of energy storage, positioning the company as one of the largest repurposers of EV battery packs globally.
In a clear showcase of confidence, Thursday’s announcement itself—complete with lights, entertainment, food and projection screens—was powered entirely by the very microgrid Redwood built in collaboration with Crusoe. “We wanted to go all-in,” an enthusiastic Straubel told attendees, emphasizing that this deployment isn’t merely a demonstration project but a fully revenue-generating and profitable enterprise. Redwood intends to roll out similar projects with more commercial partners later this year.
Straubel expressed his belief that Redwood Energy has the potential to outgrow even the company’s primary recycling operations: “I think this can grow faster than our core recycling business,” he affirmed. Founded by Straubel in 2017, Redwood Materials originally set out to close the loop in the EV battery supply chain by recycling and refining critical materials like lithium, cobalt, and nickel reclaimed from consumer electronics, battery manufacturing scrap, and end-of-life EV batteries, and then supplying those materials back to manufacturers like Panasonic.
Expanding well beyond its original Nevada headquarters, Redwood’s aggressive growth has seen the company raise $2 billion in funding, enter agreements with major names like Toyota, Panasonic, and General Motors, and even extend operations overseas through strategic acquisitions. Last year alone, Redwood generated about $200 million in revenues, largely through the sale of specialized battery components like cathode materials.
The entry into grid-scale battery energy storage not only fits neatly into Redwood’s broader business model but also addresses a crucial market need. As Redwood CTO Colin Campbell described during the microgrid tour: “There’s no green intent required here—it’s purely a good economic choice that also happens to be carbon-free.”
Industry observers have often suggested repurposing EV battery packs into large-scale energy storage could fill critical gaps in renewable energy grids, yet so far few meaningful deployments have materialized. With this ambitious move, Redwood Materials appears poised to rapidly scale up this solution by capitalizing on their access to thousands of reusable battery packs. “This clearly demonstrates how economically viable the entire waste hierarchy is,” said Jessica Dunn, a battery technology expert from the Union of Concerned Scientists, adding that Redwood’s initiative significantly influences where the broader second-life EV battery market could be headed.
For Redwood, timing matters greatly. Straubel admitted the company’s recycling business started perhaps a bit too early, initially depending on consumer batteries and production scraps instead of the anticipated flood of end-of-life EV batteries—which has yet to fully materialize at predicted volumes. According to Dunn, much of Redwood’s recycling base currently comes from battery manufacturing waste, warranty replacements, and electronics rather than end-of-life EV units.
As the anticipated streams of used EV battery packs continue to build toward a coming industry tipping point, companies must strategically position themselves to secure early market share in battery repurposing. “If Redwood hadn’t entered the repurposing market now, they would risk losing out on years of valuable revenue streams,” Dunn pointed out.
With recycling facilities already operating in Nevada and an expansive 600-acre processing and remanufacturing plant under construction in South Carolina, Redwood is working aggressively towards their stated goal of delivering 100 gigawatt-hours per year of cathode active materials and anode copper foil by the close of this year. By 2030, that number is projected to reach as high as 500 gigawatt-hours annually.
The new Redwood Energy business represents more than just an additional revenue stream; it is a critical evolutionary step for Redwood Materials, combining economic opportunity with environmental benefit and decisive strategic positioning.
